How to Pay Care Home Fees in England: Your Funding Options

By CareFinder Team · Published 2026-07-05 · Last reviewed 2026-09-18

In England, care home fees are paid by the resident, the local council, the NHS, or a mix of these. The council means-tests savings, income and usually the home: above the upper capital limit you pay in full, below it the council contributes. NHS Continuing Healthcare covers everything for people whose needs are primarily health needs, and NHS-funded nursing care pays towards nursing in a nursing home.

Care home fees in England are paid in one of four ways: by the resident from their own money, by the local council after a means test, by the NHS, or by a combination. Which applies depends on the person's care needs and on their savings, income and property. Most families end up dealing with the council's financial assessment at some point, so it pays to understand how it works before choosing a home.

The rules below apply to England. Scotland, Wales and Northern Ireland use different limits, explained near the end.

Who pays for a care home in England?

There are three possible funders, and they are not mutually exclusive:

• The resident (self-funding) – from savings, income, the sale of a home, or a deferred payment agreement with the council.
• The local council – when the person has eligible care needs and their money falls below the upper capital limit after a financial assessment.
• The NHS – in full, through NHS Continuing Healthcare, when needs are primarily health needs; or in part, through NHS-funded nursing care, when someone in a nursing home needs care from a registered nurse.

Whoever pays, the starting point is the same: a care needs assessment from the council's adult social care team. It is free and available to everyone, including people who will pay for themselves. You can request one on GOV.UK, which will point you to the right council.

How does the council means test work?

If the needs assessment shows that a care home is the right way to meet the person's needs, the council carries out a financial assessment. For the 2026/27 financial year, the DHSC charging circular sets these limits for England:

• Capital above £23,250 (the upper capital limit): the person pays the full fee.
• Capital between £14,250 and £23,250: the council contributes, and the person pays from income plus a "tariff income" of £1 a week for every £250 of capital above the lower limit.
• Capital below £14,250: capital is ignored, and the person contributes from income only.

These limits have been frozen for many years but can change, so check the current circular before relying on them.

Income is counted too. Most of a person's State Pension, private pensions and many benefits go towards the fee, but they must be left with a personal expenses allowance for their own spending. That allowance is £31.80 a week in 2026/27.

Is the home counted?

Usually, yes, once the person moves permanently into a care home. But the home must be ignored in several situations, set out in Annex B of the Care and Support Statutory Guidance:

• for the first 12 weeks of a permanent stay (the 12-week property disregard);
• while a partner or spouse still lives there;
• while a relative aged 60 or over, or an incapacitated relative, or a child under 18 lives there as their home, having lived there since before the move;
• during a temporary stay, if the person intends to return home.

Councils also have discretion to ignore the home in other cases, for example where a carer has given up their own home to live there.

What does self-funding involve?

People above the upper capital limit, or whose home counts, pay the care home directly under a private contract. Self-funders have more freedom to choose, but they should still:

• ask the council for a needs assessment, so there is a record of eligible needs;
• check that the home also accepts council-funded residents, in case money runs down later;
• read the contract carefully, including how and when fees rise.

The NHS guide to self-funding advises contacting the council about three months before savings are expected to fall to the upper capital limit. Council funding starts from the date you contact them, and you will not be reimbursed for fees paid before then.

Using the home without selling it

A deferred payment agreement lets someone use the value of their home to pay fees without selling it during their lifetime. The council pays some or all of the fees and places a legal charge on the property; the debt, plus compound interest and any administration charges, is repaid when the home is sold or from the estate. Councils must offer one to people who meet the criteria, which include having capital outside the home at or below the upper capital limit.

Other options, such as renting the home out, equity release or a care fees annuity, have tax and benefit consequences. Take regulated, independent financial advice before committing.

What happens if the council pays?

The council will agree a personal budget based on what it would cost to meet the person's needs. The person still has a right to choose a home, provided it meets their needs, has a place and will accept the council's terms.

If the chosen home costs more than the council's rate, the difference is a top-up fee. A relative or friend usually pays it, and they must sign an agreement with the council and the care home. Before agreeing, the person paying should be confident they can keep it up for years, and should know what happens if the top-up rises.

When does the NHS pay?

NHS Continuing Healthcare

NHS Continuing Healthcare (CHC) is a package of care arranged and funded entirely by the NHS for people whose needs are mainly health needs. It covers the whole care home fee and is not means-tested. Eligibility is decided by the local integrated care board, usually starting with a short checklist and then a fuller multidisciplinary assessment. Needing nursing care does not by itself mean someone qualifies.

NHS-funded nursing care

People in a nursing home who do not qualify for CHC but need care from a registered nurse can get NHS-funded nursing care. The NHS pays a set weekly amount straight to the home towards the nursing element; the rest of the fee is paid by the resident or the council.

How is it different in Scotland, Wales and Northern Ireland?

• Scotland: personal care is free for adults assessed as needing it. For care home residents, the council pays a weekly sum towards personal care, plus a nursing care payment where needed, and the resident pays for accommodation. See mygov.scot for current rates.
• Wales: people in residential care can keep more capital. The limit is £50,000, according to the Welsh Government.
• Northern Ireland: Health and Social Care Trusts use limits similar to England's, and the Trust pays towards nursing care in a nursing home.

This article is general information. For a decision about selling a home, gifting or buying a care fees product, get advice from a solicitor or a financial adviser regulated by the FCA, or free guidance from Age UK or MoneyHelper.

Frequently asked questions

Do I have to sell my home to pay for a care home?

Not necessarily. The home is ignored for the first 12 weeks, and permanently while a partner or qualifying relative lives there. If it does count, a deferred payment agreement can let you pay from its value without selling during your lifetime.

Can the council refuse to help because we own a house?

The council can decide that the home counts as capital, which would put the person above the upper limit. It should still carry out a needs assessment and must offer a deferred payment agreement if the criteria are met.

Should self-funders still contact the council?

Yes. A needs assessment is free, the council can advise on local homes, and contacting it before savings run down means funding can start on time. Councils do not backdate funding to before you contacted them.

Can a family member pay the difference if we choose a more expensive home?

Yes, this is a top-up fee. The third party signs an agreement with the council and the home. The resident normally cannot pay their own top-up, except in limited cases such as during the 12-week disregard or under a deferred payment agreement.

Who decides whether someone qualifies for NHS Continuing Healthcare?

The local integrated care board, using the national framework's checklist and decision support tool. If you disagree with the decision, you can ask for it to be reviewed.

Key takeaways

• Start with a free council needs assessment, even if you expect to self-fund.
• In England for 2026/27, capital above £23,250 means paying in full; check the current limits each year.
• The home is often ignored for 12 weeks, and permanently if a partner or qualifying relative lives there.
• Deferred payment agreements let people use their home's value without selling it in their lifetime.
• NHS Continuing Healthcare pays everything for primary health needs; NHS-funded nursing care pays towards nursing.
• Get independent advice before selling property or buying a care fees product.